Lamonda Corp. uses a job order cost system. On April 1, the accounts had balance
ID: 2329604 • Letter: L
Question
Lamonda Corp. uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below:
The following transactions occurred during April:
(a) Purchased materials on account at a cost of $233,170.
(b) Requisitioned materials at a cost of $111,100, of which $15,000 was for general factory use.
(c) Recorded factory labor of $225,400, of which $43,675 was indirect.
(d) Incurred other costs:
(e) Applied overhead at a rate equal to 130 percent of direct labor cost.
(f) Completed jobs costing $263,750.
(g) Sold jobs costing $324,370.
(h) Recorded sales revenue of $502,000.
Required:
1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. (Round your answers to 2 decimal places.)
3-a. Compute over- or underapplied manufacturing overhead. (Round your answer to 2 decimal places.)
3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will Cost of Goods Sold increase or decrease?
4. Prepare Lamonda’s cost of goods manufactured report for April. (Round your answers to 2 decimal places.)
5. Prepare Lamonda’s April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufacturing overhead. (Round your answers to 2 decimal places.)
Selling expense $ 35,300 Factory utilities 24,500 Administrative expenses 50,850 Factory rent 11,100 Factory depreciation 19,400Explanation / Answer
Requirement 1 & 2 Raw Materials Inventory Beginning Balance 28400 Accounts payable 233170 261570 Work in process inventory 96100 165470 Manufacturing overhead 15000 150470 Ending Balance 150470 Work In Process Inventory Beginning Balance 19500 Raw Materials Inventory 96100 115600 Direct Labor 181725 297325 Manufacturing overhead 236242.5 533567.5 Finished goods Inventory 263750 269817.5 Ending Balance 269817.5 Finished goods Inventory Beginning Balance 125000 Work In Process Inventory 263750 388750 Cost of goods sold 324370 64380 Ending Balance 64380 Manufactured Overhead Beginning Balance Raw Materials Inventory 15000 15000 Indirect labor 43675 58675 Factory Utilities 24500 83175 Factory Rent 11100 94275 Factory Depreciation 19400 113675 Cost of goods sold 122567.5 236242.5 Work In Process Inventory 236242.5 0 Ending Balance Cost of goods sold Beginning Balance Finished goods Inventory 324370 324370 Manufactured Overhead 122567.5 201802.5 Income summery 201802.5 0 Ending balance 0 0 Sales Revenue Beginning Balance Accounts Receivable 502000 502000 Income summery 502000 0 Ending balance 0 0 Selling and administrative expense Beginning Balance Cash/accounts payable 35300 35300 Cash/accounts payable 50850 86150 Income summery 86150 0 Ending Balance 0 0 Requirement 3-a Manufacturing overhead applied 236242.5 Manufacturing overhead incurred 113675 Manufactured ovehread over applied 122567.5 Requirement 3-b If balance in manufacturing overhead is directly closed to cost of goods sold, the cost of goods sold will decrease Requirement 4 Lamonda Corporation Cost of goods manufactured Report For the month of April Beginning balance of Raw Material Inventory 28400 Add: Raw Materials purchased 233170 Less : Ending balance of Raw materials Inventory 150470 Less : General factory use 15000 Direct materials used 96100 Direct Labor 181725 Manufactured overhead applied 236242.5 Total current manufacturing costs 514067.5 Beginning work in process Inventory 19500 Less :Ending work in process inventory 269817.5 Cost of goods manufactured 263750 Requirement 5 Lamonda Corporation Income statement For the month of April Sales Revenue 502000 Cost of goods sold Beginning Inventory of finished goods 125000 Add : Cost of goods manufactured 263750 Less : Ending Invenotry of finished goods 64380 Unadjusted cost of goods sold 324370 Less : Manufacturing overhead overapplied 122567.5 Adjusted cost of goods sold 201802.5 Selling expense 35300 Administrative expenses 50850 Net Income from operations 214047.5
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